of June 4, 1996 No. 14-310/13-163
About the value added tax
The main state tax authorities of Ukraine concerning the taxation the value added tax of the income, the loans obtained by pawnshop from transactions on issue to citizens, report.
According to the subitem "l" of Item 1 of article 5 of the Decree of the Cabinet of Ministers of Ukraine of 26.12.92 N 14-92 "About the value added tax" and the subitem "l" of Item 31 of the Instruction on procedure for calculation and the tax discharge on value added of the Main state tax authorities of Ukraine approved by the order of 10.02.93 N 3 and Ukraine registered in the Ministry of Justice 31.03.93 N 18, transactions on issue and transfer of loans are tax-exempt on value added. And according to Article 378 of the Civil code of Ukraine pawnshops perform loan operations - issue to citizens of the loan, provided with pledge of objects of the house use and private use. The same Article provides that the extreme size and the number of loans which can be issued to one person and also terms for which issue loans are determined by the Standard charter of pawnshop approved by Council of Ministers of the Ukrainian SSR.
Therefore income gained by pawnshop from transactions on issue of loans to citizens according to its charter is tax-exempt on value added.
However, if the pawnshop realizes the mortgage values which are not redeemed by the pledger citizen they are subject to the taxation the value added tax in accordance with general practice.
Deputy Minister of Finance,
chief Glavnoy of state
tax authorities of Ukraine V. Ilyin
Disclaimer! This text was translated by AI translator and is not a valid juridical document. No warranty. No claim. More info
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